With a week to go until the state budget deadline, Gov. Tom Wolf and leaders of the Republican-controlled Legislature work through their remaining differences as they try to reach agreement on a budget plan to approximately $42 billion that they say will bring together new aid for Pennsylvania public schools and environmental cleanup while lowering corporate taxes.
Greasing the slippages this year is a massive influx of tax revenue leaving state bank accounts with – by some estimates – $12 billion in reserves and surpluses, boosted by inflation and an economy fueled by federal grants. in the event of a pandemic.
There will be no general tax cut, but substantial new aid will be given to public schools, as well as services for the disabled, children and the elderly who employ low-paid workers in low-wage occupations. high turnover rates that have suffered during the COVID-19 pandemic. .
Lawmakers are also expected to approve large sums of new money for mental health services and school safety, including counseling.
Lawmakers are expected to return to the Capitol on Monday, and votes could begin soon after.
Perhaps the biggest sticking point is the amount of aid Wolf, a Democrat, wants to send to public schools.
The talks are taking place behind closed doors, as lobbyists circulate through the halls of the Capitol and grassroots lawmakers await briefings from leaders.
Budget agreements typically receive little public scrutiny before landing on a governor’s desk. In most years, hundreds of pages of budget legislation emerge from closed-door talks before several dozen bills hit floor votes — all within two or three days.
Wolf seeks what he calls “generational investments” in public schools and public universities in Pennsylvania.
For public schools, Wolf requested nearly $1.8 billion more for instruction, operations, and special education, or about 21 percent more. Of this amount, $300 million was earmarked for the 100 poorest public school districts and $200 million for special education.
Republican leaders are prepared to send more money to public schools, but rather between a third and a half of the amount requested by Wolf. The state should be wary of overspending with an economic downturn possibly underway, they say.
At public universities, Wolf had requested an additional $75 million for operations at universities in the state’s higher education system — nearly 16% more — in addition to $150 million in one-time cash from the state. remaining federal aid and $200 million a year to fund scholarships. for the students there.
Republican lawmakers have been supportive of Wolf’s request for funding for public universities now that the shrinking system has gone through cost-cutting consolidation.
But the Wolf administration is still trying to convince lawmakers about the scholarship program. In recent weeks, Wolf’s office changed tack and proposed a different source of funding: an existing 2% gambling tax in casino table games.
Even with so much cash lying around, don’t expect a generalized tax cut on income or sales.
Instead, lawmakers are aiming for a corporate tax cut, even though corporate tax collections in Pennsylvania have fallen from around 20% of all collections to around 15% in the past two years. decades, largely because the legislature ended a separate tax on corporate assets.
Republican lawmakers say cutting the state’s 9.99% net corporate income tax rate — one of the highest in the nation — will attract more business, jobs and residents taxpayers to stimulate the state’s economy and slow population growth.
Democrats say it is more effective to invest more money in infrastructure, schools and quality of life issues.
Wolf is an ally in the fight to cut corporate taxes, but insisted that any tax cut comes with structural changes to crack down on tax avoidance strategies used by multistate corporations.
Wolf also argues that increasing funding for schools has the effect of a large reduction in property taxes, because it means the state takes a larger share of public funding for education. Pennsylvania allocates a higher proportion of school funding to local property taxes than most other states.
Most of the new spending will be used to keep pace with the rising cost of medical care for the poor and long-term care for the elderly and disabled.
Additionally, budget negotiators say they are looking to increase grants for nursing homes, child care centers and disability programs, all services that say they are struggling to find workers and, in some cases , plagued by closures.
Nursing home trade associations have called for an increase in the Medicaid reimbursement rate of $295 million a year, or about 20%, saying they are losing money on every Medicaid enrollee.
Securing tens of millions of dollars in additional aid for mental health programs is a top priority for counties and hospitals.
A lack of services and beds means people who come to emergency rooms in crises often stay there for long periods of time due to a lack of providers, according to the Hospital and Healthsystem Association of Pennsylvania. Counties and hospitals are also seeking more money for early intervention programs, to ensure more counseling services are available to help prevent a crisis.
Meanwhile, schools are asking for more money for security, in light of the Uvalde school shooting in Texas that killed 19 students and two teachers.
That money — perhaps $100 million more — could fund physical security devices like metal detectors or security guards, but also school counselors or psychiatrists — a growing need that researchers say. school officials, has been accelerated by the COVID-19 pandemic and mass shootings.
Wolf and top lawmakers say they are working to allocate $2.2 billion in remaining federal coronavirus aid approved by Congress last year.
A proposal by Wolf to send part of it in the form of $2,000 checks to households earning less than $80,000 a year won no Republican support.
Still, Republicans are considering a Wolf proposal using $204 million in federal aid to raise property tax and rent rebate checks by $475 for all 466,000 people in the program.
Some of the money could go toward a new $250 million “clean stream” program to help improve water quality in state waterways.
At least some of that money would go to help the state meet its commitments to improve water quality in the Chesapeake Bay. More than 90% of the state’s remaining pollution reductions must come from preventing agricultural runoff, according to the Chesapeake Bay Foundation.
Wolf is also pushing to use some of the money for anti-gun violence programs and housing subsidies.